Axis Asset Management Company Limited (“Axis AMC”), promoted by Axis Bank and Inversion Advisory Services (“Inversion”), promoted by telecommunications veteran Mr. Akhil Gupta, has announced that, “It has entered into a partnership to acquire controlling stake primarily in pre-stressed, stressed, distressed and other underperforming assets.”
“It will raise up to Rs 3,500 crore for the proposed new fund under its Alternative Investment Fund registration,” the statement said.
“It will also seek to take advantage of the strong fund management expertise of Axis AMC and operational and turnaround expertise of Inversion to offer a unique platform for investors,” the statement added.
It will be a unique first of its kind offering that will look to take controlling equity stakes in underperforming companies before working with them to turn them around, and will thus help such quality companies with strong performance and operational capabilities which may be facing temporary headwinds owing to special circumstances including unsustainable debt, temporary disruptions, etc. to get on a credible turnaround path.
The partnership seeks to help fill the gaping shortage of high-quality equity capital in the country’s stressed company ecosystem, which has seen several debt offerings but lacks strong equity investors with an operational skillset.
Axis AMC (which will be the Investment Manager of the fund), with its end-to-end investment and fund management credentials, and Inversion with Mr. Akhil Gupta’s demonstrated operational and turnaround experience, are uniquely suited to launch a special opportunities fund. The Investment Manager will employ a team to evaluate potential opportunities. The inversion would provide management support to acquired companies with its team of functional & industry experts.
Speaking on the development, Chandresh Nigam, MD & CEO, Axis AMC said, “Axis AMC has always been at the forefront of product innovation and seeking to offer quality long term solutions to our investors. With our entry into the exciting space of turnaround investing, we believe we have created a unique proposition for investors looking to participate and benefit from the India growth story. We are also extremely excited to partner with Inversion and Akhil on this journey – their expertise will be invaluable in making this a success”.
Commenting on the partnership with Axis AMC, Akhil Gupta, Chairman, Inversion Advisory Services commenting said, “Inversion is delighted to partner Axis AMC on this exciting journey to turn around underperforming assets. The combination is ideal to not just exploit large untapped potential in this space but also serve an important social purpose in saving a large number of jobs and capital already invested by shareholders, lenders, and vendors in such companies”.
Further adding to the statement on the partnership, Amitabh Chaudhry, MD & CEO, Axis Bank said on the entry into turnaround space, “it gives me great pleasure to see Axis AMC tying up with Inversion group to tap into the unique opportunity of turnaround investing and I strongly believe that together we can create an offering that can help investors participate profitably in this asset class. The addition of this new capability will also take us forward on our path of creating a market-leading alternatives platform within the AMC.”